What HR needs to know about Medicare

1 in 10 Baby Boomers are still working so, odds are, some of your employees are Baby Boomers. When it comes to Medicare, there are a few things to keep in mind as you help transition employees into retirement:  

1. COBRA → many organizations offer COBRA (Consolidated Omnibus Budget Reconciliation Act) health insurance, which allows employees --and often their spouses and dependents-- the ability to continue to have health insurance through the employer for up to 18 months after retirement. While this is a great perk to have, Medicare does not count COBRA as credible coverage. What You Need To Do: Once you’ve started COBRA, you have 8 months to sign up for Part B. If you do not sign up for Part B in time, you may get locked out of the system until the next enrollment period between January 1st and March 31st with coverage beginning on July 1st.

2. Part B forms → If an employee is turning 65, there are 3 main ways to sign up for Part B:

1. Call the Social Security Administration;

2. Visit ssa.gov/medicare and enroll online; or

3. Visit your local Social Security Administration

If an employee is over 65 and working, leaving work coverage opens up a Special Election period (SEP) allowing you to enroll in Part B after work coverage ends.  However, you will need to submit 2 paper forms:

1. CMS 40B → this form simply asks for basic identifying information: your name, address, social security number, and signature

2. CMS L564 → this form needs to be filled out by the employer verifying that the employee had healthcare coverage under your employ; this form is necessary in order for the employee to avoid any Part B penalties. These forms should be sent to Medicare through Social Security.  

3. HSAs → an employee cannot contribute to an HSA account for up to 6 months prior to signing up for Part A due to a 6-month lookback period (the lookback does not go before age 65). If they do contribute, they may be taxed on their contribution. If an employee wants to continue contributing to their HSA but does not want to be taxed, they may delay signing up for Part A.